MEMORANDUM CIRCULAR NO.

54

PRESCRIBING THE GUIDELINES GOVERNING SECTION 20 OF RA 7160

OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991
AUTHORIZING CITIES AND MUNICIPALITIES TO RECLASSIFY AGRICULTURAL
LANDS INTO NON-AGRICULTURAL USES

WHEREAS, RA 7160, otherwise known as the Local Government Code of 1991

(LGC), provides that cities and municipalities may reclassify agricultural lands into
non-agricultural uses within their respective jurisdictions, subject to the limitations
and other conditions prescribed under Section 20 of the LGC;

WHEREAS, the implementing Rules and Regulations (IRR) of the LGC provides that
cities and municipalities shall continue to prepare their respective comprehensive
land use plans, enacted through zoning ordinances, subject to applicable laws and
rules and regulations;

WHEREAS, the IRR also prescribes that such plans shall serve as the primary and
dominant bases for future use of land resources and reclassification of
agricultural lands;

WHEREAS, the IRR further provides that the requirements for food production,
human settlements, ecological balance, and industrial expansion shall be
considered in the preparation of comprehensive land use plans;

WHEREAS, EO 129-A, s. of 1987, mandates the Department of Agrarian Reform

(DAR) to approve or disapprove the conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses;

WHEREAS, the said EO has also vested in DAR exclusive authority to approve or
disapprove conversion of agricultural lands for residential, commercial, industrial,
and other land uses;

WHEREAS, Section 65 of RA 6657, otherwise known as the Comprehensive

Agrarian Reform Law of 1988 (CARL), likewise empowers DAR to authorize, under
certain conditions, the reclassification or conversion of lands awarded to agrarian
reform beneficiaries;

WHEREAS, pursuant to the pertinent provisions of EO 129-A (1987), EO 229 (1987),

and RA 6657, DAR issued various rules and regulations governing the conversion
or reclassification of agricultural lands into non-agricultural uses;

WHEREAS, there is a need to harmonize the provisions of Section 20 of the LGC

with those of EO 129-A (1987), EO 229 (1987), RA 6657, and other national policy
issuances and other pertinent laws to ensure a more rational and holistic approach
to land use, taking into account the objectives of the CARL and the decentralized
framework of local governance;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the

powers vested in me by law, upon the recommendation of the Oversight
Committee created under Sec. 533 of the LGC, do hereby order and direct:

SECTION 1. Scope and limitations. – (a) Cities and municipalities with

comprehensive land use plans reviewed and approved in accordance with EO 72
(1993), may authorize the reclassification of agricultural lands into non-
agricultural uses and provide for the manner of their utilization or disposition,
subject to the limitations and other conditions prescribed in this Order.

(b) Agricultural lands may be reclassified in the following cases:

(1) when the land ceases to be economically feasible and sound for agricultural
purposes as determined by the Department of Agriculture (DA), in accordance with
the standards and guidelines prescribed for the purpose; or

(2) where the land shall have substantially greater economic value for residential,
commercial, or industrial purposes as determined by the sanggunian concerned,
the city/municipality concerned should notify the DA, HLRB, DTI, DOT and other
concerned agencies on the proposed reclassification of agricultural lands
furnishing them copies of the report of the local development council including the
draft ordinance on the matter for their comments, proposals and
recommendations within seven (7) days upon receipt.

(c) However, such reclassification shall be limited to a maximum of the percentage

of the total agricultural land of a city or municipality at the time of the passage of
the ordinance as follows:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

For component cities and first to third class municipalities, ten percent (10%); and

For fourth to sixth class municipalities, five percent (5%).

(d) In addition, the following types of agricultural lands shall not be covered by the
said reclassification:

(1) Agricultural lands distributed to agrarian reform beneficiaries subject to

Section 65 of RA 6657;

(2) Agricultural lands already issued a notice of coverage or voluntarily offered for
coverage under CARP.

(3) Agricultural lands identified under AO 20, s. of 1992, as non-negotiable for

conversion as follows:

(i) All irrigated lands where water is available to support rice and other crop
production;

All irrigated lands where water is not available for rice and other crop production
but within areas programmed for irrigation facility rehabilitation by DA and
National Irrigation Administration (NIA); and

All irrigable lands already covered by irrigation projects with firm funding
commitments at the time of the application for land conversion or reclassification.

(e) The President may, when public interest so requires and upon recommendation
of the National Economic Development Authority (NEDA), authorize a city or
municipality to reclassify lands in excess of the limits set in paragraph (d) hereof.
For this purpose, NEDA is hereby directed to issue the implementing guidelines
governing the authority of cities and municipalities to reclassify lands in excess of
the limits prescribed herein.
SEC. 2. Requirements and procedures for reclassification. – (a) The city or
municipal development council (CDC/MDC) shall recommend to the sangguniang
panlungsod or sangguniang bayan, as the case may be, the reclassification of
agricultural lands within its jurisdiction based on the requirements of local
development.

(b) Prior to the enactment of an ordinance reclassifying agricultural lands as

provided under Sec. 1 hereof, the sanggunian concerned must first secure the
following certificates from the concerned national government agencies (NGAs):

(1) A certification from DA indicating –

(i) the total area of existing agricultural lands in the LGU concerned;

(ii) that such lands are not classified as non-negotiable for conversion or
reclassification under AO 20 (1992); and

(iii) that the land ceases to be economically feasible and sound for agricultural
purposes in the case of Sec. 1 (b-1).

(2) A certification from DAR indicating that such lands are not distributed or not
covered by a notice of coverage or not voluntarily offered for coverage under
CARP.

(c) The HLRB shall serve as the coordinating agency for the issuance of the
certificates as required under the preceding paragraph. All applications for
reclassification shall, therefore, be submitted by the concerned LGUs to the HLRB,
upon receipt of such application, the HLRB conduct initial review to determine if:

(1) the city or municipality concerned has an existing comprehensive land use plan
reviewed and approved in accordance with EO 72 (1993); and

(2) the proposed reclassification complies with the limitations prescribed in

SECTION 1 (d) hereof.

Upon determination that the above conditions have been satisfied, the HLRB shall
then consult with the concerned agencies on the required certifications. The HLRB
shall inform the concerned agencies, city or municipality of the result of their
review and consultation. If the land being reclassified is in excess of the limit, the
application shall be submitted to NEDA.

Failure of the HLRB and the NGAs to act on a proper and complete application
within three months from receipt of the same shall be deemed as approved
thereof.

(d) Reclassification of agricultural lands may be authorized through an ordinance

enacted by the sangguniang panlungsod or sangguniang bayan, as the case may
be, after conducting public hearings for the purpose. Such ordinance shall be
enacted and approved in accordance with Articles 107 and 108 of the IRR of the
LGC;

(e) Provisions of Sec. 1 (b-2) hereof to the contrary notwithstanding, the

sanggunian concerned shall seek the advice of DA prior to the enactment of an
ordinance reclassifying agricultural lands. If the DA has failed to act on such
request within thirty (30) days from receipt thereof, the same shall be deemed to
have been complied with. Should the land subject to reclassification is found to be
still economically feasible for agriculture, the DA shall recommend to the LGU
concerned alternative areas for development purposes.

(f) Upon issuance of the certifications enumerated in Section 2 (b) hereof, the
sanggunian concerned may now enact an ordinance authorizing the
reclassification of agricultural lands and providing for the manner their utilization
or disposition. Such ordinance shall likewise update the comprehensive land use
plans of the LGU concerned.

SEC. 3. Review of ordinances reclassifying agricultural lands. – All ordinances

authorizing the reclassification of agricultural lands shall be subject to the review
and approval by the province in the case of component city or municipality, or by
HLRB in the case of a highly urbanized or independent component city in
accordance with EO 72 (1993).

SEC. 4. Use of the comprehensive land use plans and ordinances as primary
reference documents in land use conversions. – Pursuant to RA 6657 and EO 129-
A, actions on applications for land use conversions on individual landholdings
shall remain as the responsibility of DAR, which shall utilize as its primary
reference documents the comprehensive land use plans and accompanying
ordinance passed upon and approved by the LGUs concerned, together with the
National Land Use Policy.

SEC. 5. Monitoring and evaluation of land reclassification by LGUs concerned. –

Within six (6) months from the issuance of this Order, the HLRB shall design, in
coordination with DA, DAR, Department of the Interior and Local Government
(DILG), NEDA, League of Provinces, League of Cities and League of Municipalities,
and install a monitoring and evaluation system for the reclassification of
agricultural lands authorized by cities and municipalities.

The HLRB shall submit semestral reports to the Office of the President. A copy
thereof shall be furnished the DA, DAR, DILG, NEDA, League of Provinces, League
of Cities, and League of Municipalities.

SEC. 6. Transitory provision. – Provisions of Secs. 1 (a) and 2 (b) to the contrary
notwithstanding, cities and municipalities with land use plans approved not earlier
than 01 January 1989, may authorize the reclassification of agricultural lands in
accordance with the limitations and conditions prescribed in this Order. However,
when the LGU has not reclassified up to the said limitations, further
reclassification may be exercised only within five years from the approval of the
plan. Thereafter, all reclassifications shall require approval from the President
pursuant to Sec. 1 (e) of this Circular.

SEC. 7. Effectivity. -.This Circular shall take effect immediately.

DONE in the City of Manila, this 8th day of June, in the year of Our Lord, nineteen
hundred and ninety-three.

(Sgd.) FIDEL V. RAMOS